1. Get your Finances on Track
Run a free credit report from one of the many online services and make sure there is nothing out of the ordinary. A $20 unpaid bill from a company could be sent to a collection agency and hurt your credit! Review your credit report and dispute any false claims BEFORE you start the home buying process. If you do not have much credit history, try to create three steady lines of credit. Three different credit cards that you pay off every month with help you build good credit.
2. Learn about the Mortgage Industry
Unless you plan on paying cash upfront for your house, you are going to need a mortgage. There are different types of mortgages for all different levels of buyers. How much money you plan on putting down, your credit score, the location you are looking to buy in, and your life situation (first time buyer, veteran, etc) can all affect the different mortgage choices available for you. Finding a good mortgage lender to explain all of your options is an important part of the home buying process.3. Obtain a Mortgage Pre-Approval
After your mortgage lender verifies your credit, employment, and past tax returns, your lender will be able to give you a Pre-Approval for a mortgage. This Pre-Approval will tell you how much you can qualify for so you know what types of houses to look at. You will need a Pre-Approval to submit any offers on any properties, so getting one before you even start looking is a good idea.
4. Decide what you WANT versus what you NEED
In a perfect world you would be able to find a home in your price range with everything you want and need. However, depending on current inventory this is not always a reality. Decide from the get-go what you need in a home versus what you want in a home. This will make is easier for your real estate agent to find homes that definitely meet your needs, and hopefully many of your wants as well.5. Find a Real Estate Agent to Work with
We recommend finding a Buyers Agent to work with while house hunting. A Buyers Agent will be there to look out for your best interests during the home buying process. Make sure your agent is also a Realtor®. All Realtors® are real estate agents, but not all real estate agents are a Realtor®. All Realtors® are held to very high ethical standards.
6. Time to go House Hunting!
Armed with your pre-approval, a Realtor®, and your wants and needs list, it’s time to start looking for houses! Your Realtor® will set up a search for you to find current homes that meet your needs as well as to be notified when new homes come on the market. You can also search for a home online to get an idea of what types of homes are available that you might like.
7. Putting an Offer In
After you find a house that you love, you will have to put in an offer: a proposed Agreement of Sale for the property. Real estate laws are complex, but your Realtor® will be will to walk you through all of the standard contracts.8. Inspecting the Property
Buying a home is a very large investment, and you should feel comfortable with the condition of the home before making that investment. When writing the offer you have the option to elect to make the sale contingent on doing a home inspection. This way, if something bad comes up in the home inspection you can ask the seller to fix the problem, give you a credit at closing to fix the problem yourself, or you could ultimately walk away from the property and get all of your deposit money back. There are multiple different kinds of inspections that can be done on a property, talk with your agent to see what makes sense for your situation.9. Staying on top of the Deal
Before closing, there are multiple deadlines that must be met for such as applying for the mortgage, sending in deposits, and performing the inspections. Stay in constant communication with your agent to make sure you do not miss any of these important deadlines.
10. Welcome Home!
Transfer of title will take place during closing (also known as settlement). After signing all of the legal paperwork you will receive the keys to your new home. Congratulations!